MANUFACTURERS in the region are at risk because they have failed to capitalise on a world market boom, a survey suggests.

The Ernst and Young winter forecast shows the UK economy improving modestly this year, with growth of 2.6 per cent, but economic experts expressed fears about the manufacturing sector.

One of the biggest fears was that export growth would fail to grow.

And the North would suffer most because of its reliance on manufacturing, the study reveals.

Despite a strong global economy, UK manufacturing exports only rose by 4.4 per cent last year, and two per cent in the North, while world trade grew by 11.6 per cent.

Professor Peter Spencer, chief economic advisor to the Item club, Ernst and Young's economic forecasting arm, said: "These numbers reflect a major loss of market share for northern exporters.

"It is simply a case of lack of capacity preventing manufacturers in the region from exploiting the strong export markets available.

"Off-shoring, plant closures and falling investment spending have reduced their ability to supply these markets.

"In the North of England the importance placed on this sector is not just down to its heritage in old-fashioned textile production, but the significance of modern, light manufacturing aspects of the sector today to the regional economy."